Tag Archives: tax

What expenses can you claim against tax

This is one of the most frequently asked questions…what expenses to claim to offset against sales and to reduce the tax bill.

Well if you are an employee the answer is somewhat limited to wholly, exclusively and necessarily incurred costs. But if you are a sole trader then the definition is more widely drawn as just wholly and exclusively.

Staff costs. The costs associated with your employees should be fully recoverable. The pay, benefits, pensions and their travel on work related business.

Rent and rates. All the premises costs should be allowable unless there is a private use element.If you use your home as an office then the Inland Revenue allow a nominal amount. You can claim more but you will need to justify the claim.

Telephone costs. Mobiles and landlines.Should be fully allowable but there are cases where an estimate of private use might be excluded.

Repairs and renewals.Fully allowable but you need to be able to distinguish between a repair and a capital addition.

Professional fees. Usually allowed eg accountants fees. Some costs might be capital and you will only get relief when the asset is sold and then as an increase in the base cost for capital gains tax.Examples being legal fees and any expense to protect your right to the asset.

Printing, postage and stationery. As long as incurred for the business these are allowable.

Entertaining...these are not allowable.

Travel costs – generally are allowed but exceptions cover instances where excess luxury or personal involvement are in play.

Motor costs. Largely allowable but care is needed to identify any capital costs such as depreciation.

Training costs are generally always allowed but there are restrictions for sole traders training for new skills.

You are welcome to contact us for free advice. Wherever you are, Carlisle, Brampton, Penrith or indeed anywhere in Cumbria do call us for advice on tax and bookkeeping.

RTI relaxation for small business

The introduction of RTI must be one of the most fundamental changes in payroll for small businesses in many a year. Fortunately HMRC seem to be starting to recognise some of the issues and they have announced the following. Taken from here.

HMRC has extended the temporary relaxation of real time information (RTI) reporting rules for small businesses for a further six months to April 2014.

The relaxation applies to businesses with less than 50 employees and was originally set to run until October 2013.

According to HMRC:

These transitional arrangements only apply to small employers who pay their staff manually, for example, weekly or fortnightly and then take their records to their payroll provider monthly to process the payroll for the month. These arrangements do not apply to small employers who can run their payrolls weekly or fortnightly and can report payroll information at the time of payment.

Anti-avoidance GAAR

The UK is, at last, getting a legal framework for anti avoidance….a general anti avoidance rule or GAAR.

The new rules are contained in the Finance Bill 2013 and should receive Royal Assent in July this year.

Essentially this combats schemes which aim to save tax in away which was not anticipated by parliament when the relevant tax law was written AND also where the course of action cannot be argued as reasonable.

Schemes caught by this net will be assessed by three members chosen from an advisory panel.

Not really something most small Cumbrian businessmen will need to worry about. But in an age where the big tax avoiders seem to take all the headlines maybe a step in the right direction.

References: Taxline June 2013